LONDON (ICIS)–Significant investment is required if the UK is to achieve its new nuclear ambitions, according to ICIS analyst.
The Chancellor of the Exchequer, Jeremy Hunt, announced an ambitious target to generate a quarter of UK electricity from nuclear energy by 2050 in the Spring Budget on 15 March.
“It is possible, but would require massive investment to do so,” said the Lead Analyst at ICIS, Matthew Jones.
ICIS Analytics data for a low renewable energy share scenario shows that nuclear capacity could increase to 17.5GW by 2050 however, a base case scenario with increased capacity from renewable energy sources shows only 10.7GW of nuclear capacity by 2050.
“Given that all existing plants will close by the mid-2030s, the only plant under construction is Hinckley Point C, which is 3.5GW. Based on our demand figures for 2050 (which are conservative), you would need to build more than 20GW for a quarter of output to come from nuclear by then,” the analyst added.
In an attempt to attract future nuclear investments, Jeremy Hunt announced that nuclear will be reclassed as ‘environmentally sustainable’, therefore enabling nuclear energy to access the same investment incentives as renewables.
In the Autumn Statement , the Chancellor confirmed that the 3.2GW Sizewell C nuclear plant will go ahead, with the plant anticipated to provide up to 7% of the UK’s electricity needs.
However, Sizewell C is not yet under construction and is not anticipated to generate electricity until the 2030s.
SMALL MODULAR REACTORS
The Chancellor also launched the first competition for Small Modular Reactors (SMRs) in the Spring Budget however, market participants remain sceptical.
“The lead time on the first mega-watt generated must be 6-8 years minimum, even with small reactors,” a trader told ICIS.
“As for the SMRs, they still have to go through most of the same hoops as big nuclear in terms of nuclear safety and we all know how that adds to delays by just looking at Hinkley,” a second trader said.
CARBON CAPTURE BOOST
The Government also announced up to £20bn for support of early development of Carbon Capture Usage and Storage (CCUS).
CCUS is a major technology in meeting the UK’s Net Zero by 2050 target however, the technology is not yet affordable or widely available.
“As yet, CCS is unproven and very costly, and the current schemes being trialled are in no way near completion,” the second trader said.
“In summary, I think they’re great initiatives and will help in the long-term but it won’t solve any issues within the next decade,” the second trader added.
